Welcome everybody to our executive Q&A session for the investment community. I hope you all enjoyed this morning's events, and it was very special to be back in person and glad to have you here. Thanks to those that are on the webcast. We appreciate your interest. It's special for a few reasons. One, this is gonna be Brett's last Q&A session. Wow. with the investment community. He'll be fielding all the questions. Thank you, Brett, for your service to the company. Thank you. We all appreciate your time as CFO and your guidance. Thank you. I also wanna make a very special warm welcome to Maggie Gilliam. I don't know how many people know Maggie Gilliam, but she was like a rock star Wall Street analyst when I was in grade school. She's been coming down to these meetings when I was pretty young, and I was always an admirer. Her research still graces our bookshelves. We still cite it on a regular basis. So welcome, Maggie. We appreciate you making the long trip. Maggie was saying that she probably came to the first one in 1970. Yeah, I just asked her that. She said it was in the seventies. I was like, "Wow. There are some great photographs, Maggie, of you and Sam Walton, with you asking him hard questions. I'm inspired by that all the time. In a canoe. How many canoe trips did you do? Oh, I ran out of them. I've been to 10 more. Too many. Yes. Yes. Yes. You survived all of them. Yes, I remember. Yeah. You guys don't wanna go on a canoe trip anymore, do you? It was fun. Maggie says it's fun. We're gonna have to do that again. I know we can say 14 years later, it was fun. The agenda for this next hour, I'm gonna pass it to Doug briefly for some opening remarks, and then we'll answer your questions. You'll just have to raise your hand. My team will have mics, and they'll pass them around. If you could just do us a favor of stating your name and your firm for the benefit of those on the webcast, that would be greatly appreciated. Before we get started, let me remind you that we may make forward-looking statements during our discussion today. These statements are subject to risks and uncertainties that could cause actual results to differ materially from these statements. These risks and uncertainties include, but are not limited to, the factors identified in our filings with the SEC, and you can review our full safe harbor statement on our investor relations website at stock.walmart.com. With that, pass it to you, Doug. Good afternoon, everybody. Appreciate you making the trip. It's good to see a lot of familiar faces. I've missed this. I hope that you've enjoyed coming back and doing it again. I'll start with introductions and make a couple comments, and then we'll open it up for questions. I'll start up here. Suresh Kumar, as I think you all know, leads our technology areas, continues to do an outstanding job, is building a really strong team and getting a lot done. Judith McKenna, as you know, leads our international team. She probably doesn't have much hearing left after this week because it's been so fun. Brett Biggs got the longest hug today, unless any of you wanna set a new record, come up at the end and hug Brett more. No. I appreciate Brett for lots of things, and I've talked about that a lot lately. One of the things I appreciate is the way he's handled this transition. I didn't want Brett to transition at this point, but he was ready to do that. He was gracious enough to work with us over a period of time to create a very smooth transition plan and a very transparent plan, which I appreciate, which led to the hire of John David Rainey, who's sitting over here to the right. John, if you would stand up. I think it's June sixth, three days from now, that you become the official CFO of the company. You guys can ask him questions, too, if you want. He doesn't know anything. Is this week two, I think? Week two. Here's John Furner. John leads Walmart U.S., but as you know, has led Sam's, lived in China for us, done a lot for the company. Kathryn McLay, who leads our Sam's Club business here in the U.S. It's exciting to have a meeting where you can make one of these big presentations, Kath. You did a great job today. Seated over at this table, we have Donna Morris, who leads our people team, and Rachel Brand, if you guys would stand up. Donna first. Rachel Brand leads our governance areas. Dan Bartlett leads corporate affairs, sustainability, and other areas. We've got a bunch of other Walmart people around, other Walmart and Sam's Club leaders. You guys can just raise your hand. A bunch of people in the back that if you ask us really difficult questions, we'll drag them into this process. I won't introduce them all. We did not enjoy the first quarter. We were, as we've said, kinda surprised by the pace of change and the magnitude of cost impact, kind of middle of the quarter on. We faced inflationary pressures kinda throughout the income statement. Top line was in pretty good shape. As we mentioned, we do see some changes with some really value-conscious customers, as we mentioned. We'll see how that plays out quarter to quarter. Not a lot's changed since we released our results, so we'll probably repeat a lot of what we shared at that time. But we'll see how we go as we go through the Q&A. We're focused on keeping the top line going. We do care about units and dollars. We'll track baskets, units, market share. We'll look at all those metrics to evaluate our own performance as we look ahead. We've been working really hard on costs, top to bottom, taking action to get our costs down so that the second quarter looks better than the first quarter, and then we're on our way. It'll take a little bit of time to work through the inventory. We have more inventory than we want, and we'll talk more specifically about that during the Q&A, I'm sure. We didn't, as shareholders, enjoy that process. We're all very vested and care a lot about what happens with the share price. We are long-term thinkers. We care about the short term, we manage the short term, and then over the last few weeks in particular, you saw the team react in a very detailed and aggressive way. Some people inside the company kind of called it old school Walmart. And that's a compliment to me we still know how to run a retail business down to the granular level, and when pressured, that's what happened. We have a great strategy. We're excited about how the business model itself is changing. We can build a more profitable company. Some of the things that we've started are really encouraging, and that'll result in a better bottom line as we continue to have a top line that grows and earn share and earn the favor of customers and members, which is our goal. We don't really see anything strategically that concerns us. We just wanna go faster to get those things done as we manage the short-term pressures which seem to change, fairly frequently. You know, it's a very fluid environment, and obviously, the pandemic was a significant change, and there were things that happened within that pandemic period and racial equity and other things that occurred. Now we're staring a different set of circumstances in the face, and we'll adjust to those just as we did the other ones. Dan, with that, I'll open it up to questions from you. All right. Great. Well, we had lunch with Lior Susskind, so we already know what their questions are. We're prepared. We'll go to Robert Ohmes first with Bank of America. Hi, Robbie. Oh, hey. Thanks, Doug. Robert Ohmes, Bank of America. I have one question, but as many of you up there would be willing to comment on it, I'd be really grateful because it's kind of a question I'm getting a lot, and you're probably not gonna answer it as much as you know I would want you to. In the scenario that inflation remains you know very elevated and kind of broadly elevated, what is the outlook and profitability for discretionary you know versus grocery? You've had some profitability issues in discretionary very recently in the first quarter, but it seems like grocery and consumables has held up. You know, what is the thought process? Can grocery get less profitable like discretionary has? Can it get more profitable in an inflationary environment like this? Is there some balance between discretionary versus grocery? Anything each of you could tell me to figure out this puzzle would be wonderful. Yeah. Would you just go and give us the answers to the puzzle? That would help a lot. I'll kick it off kind of generally, and then, John, you and Judith and Kath and Brett and others can chime in if you want to. We make money in food, and we make money in fresh food, and that mix of fresh to dry grocery is another dimension to keep an eye on. I do worry sometimes when we talk about market share growth in grocery that somehow there's a shorthand that that means there could be margin pressure. We make money in fresh food and in dry grocery. We can manage inflation in those areas. General merchandise, apparel, seasonal hard lines, home, those are all really important, both in stores and online. Yeah, we care about growing those. Getting the inventory level right is one of the keys to success. When you get too much, you get too many markdowns, you get too much handling. You get too little, and you don't have enough to really drive the margin mix. We'll talk more about inventory. Maybe we can just address it now. To me, that's the key when I think about getting the mix right over time, more so than just how the customer member responds to the environment. Yeah. Robbie, let me pick up the inventory point. You know, if you look at the end of the first quarter, we were up a little over 32%. If you step back and somewhat break that apart, there's probably 20% of it, if you could just wish away and make it disappear, you would. There was some really healthy improvements in there as well. About a third of the increase, you know, roughly a third was getting us back into the position you wanna be in for customers, be back in stock. Remember the year before, we had stimulus that helped in general merchandise. Throughout the pandemic, there were categories, some frequently, some infrequently, that were just out of stock and hard to get to. That was important. Then there was the impact of inflation as well. When you put all that together, I think our team, and many of them are here today, have done a great job really since the middle of the quarter when the cost came through and really the inventory came through pretty quickly as well as ports and containers and things moved really at a pace we hadn't seen in the last couple years. As that all happened, they've done a great job of getting inventory moved out into our distribution centers, our fulfillment centers through the import network. We're working on the positioning. I think it's gonna take, you know, this quarter and probably part of next, maybe a couple quarters, would be the best way to describe it, to get back to where we wanna be. Some of the inventory that is here, we brought forward because of the long lead times we were seeing at port. We do have some of our late Q2 and Q3 inventory already here, which will help us over the long term. We'll continue to work through this, but I think it's a couple quarters. The thing Doug said that's important, when you look at the mix of not only the supercenter, but the supercenter and e-commerce, the supercenter and e-commerce and marketplace all across the entire business, then our merchants have a lot of flexibility in terms of what they leverage and what they leverage up and what they can leverage down if the customer chooses to buy other things. Mix within categories is important. Mix within food to fresh is important. Consumables works the same way. You know, we mentioned in the first quarter, we took some markdowns in apparel. The weather was soft at that point. We wanted to get ahead of that. The rollbacks that we put in the store, and if you walk the stores or you go on the site, you'll see a big section of rollbacks. Those are working. The customer is responding. We're positioned, I think, really well to serve customers given any change we see. If you look all the way back into the early 2000s in different markets, Walmart's positioned well to do a great job. The team is, as Doug said, I really enjoyed the last few weeks, even though it was hard and wasn't the results you wanted. I really enjoyed seeing how quickly the team can respond and get all the way into the details, run great stores, make improvements on the website. Some of them in an hour at times. They're moving really quickly to stay ahead of this and make sure we're in great shape. That 20% number you mentioned. This is the overage amount. Like, if we could snap our fingers and have part of our inventory go away, it'd be 20% of the overage, not 20% of the total. Just to clarify that. Thank you. Yeah, the growth. That's exactly right. Yeah. I would just say, like, the last two years we've seen phenomenal growth. You know, part of it was people had different behaviors with COVID. They're at home. They're doing up their backyards. They're eating at home and not going out to restaurants. We came into this year thinking, "I wonder what's gonna happen as we move forward. Are we gonna have people going back out to restaurants and traveling, and what would be the impact on sales?" Well, right now with inflation, they're not going out into restaurants as much, and they told us that they're not gonna travel as much. Boy, we've got the inventory for them. What we're looking at is just how do you continue to be the place where they wanna shop because you're giving them great value? One of the things about general merchandise too that I mentioned is that there are opening price points throughout the general merchandise side of the store. If we talk about it in terms of the store, there are tennis balls and sporting goods. There are opening price point T-shirt items in ladies' wear. Managing where those get positioned and then thinking about other price points that you may wanna roll back to drive mix, that's another variable that we manage. Units, traffic across the whole box, rollout of rollbacks, rollout of opening price points, those are some of the variables that we manage. Anything you wanna add? No, just maybe the only thing I would say is one of the advantages that we have as a company, and we see all of those across the markets in taking very similar actions, is that we have people across the markets who have deep experience in inflationary times. We have one of our presidents is Brazilian, another is Argentinian. Our chief merchant in Mexico is Argentinian. That team have been gracious enough to spend a lot of time with all of the other teams around the world, John, including your team, merchants, operators, everybody, helping everybody understand what are the things that you navigate through at these times and what levers you can pull and what works. Assuming short-term, medium-term, whatever that looks like, they have experience of it, including on the other side of it as well. One of the powered by Walmart elements of this is we have people who know these environments and can help share that really fast. I sat through one of those clinics a couple weeks ago, and it was awesome. I got reminded of some things that I had experienced when I moved into international the first time in 1999 and got exposure to Brazil. Cooking oil was going like this, like daily going up, and I had never seen anything like that before. Yeah. Their tactics are clear and helpful. They are. One of the things that Gui, who's our president in Mexico, he's a Brazilian, is focus the business on controlling the things that you can control and spend your time there because that is actually how you'll get the best results. We'll go to Simeon Gutman next. Thank you. Simeon Gutman, Morgan Stanley, and well wishes to you, Brett Biggs. Thanks, Simeon. Do I get one and a follow-up or I'll put them all in now? Too far. Doug, you said nothing has really changed since we last spoke. Curious what type of consumer is assumed in your guidance for the rest of the year. There are multiple headwinds, and they feel like they're rising, not going down. You're maybe taking price as prices are going up, inflation in general. That's the first question. Yeah. If we think about the most value-conscious customer group, we're watching that group. I'm kind of giving you a U.S. answer, but I think this is somewhat true around the world. How is that group behaving and what do they need from us? As I mentioned during the call, we're thinking about opening price point items. Charles Redfield's our Chief Merchant sitting back here for what they need to put food on the table. We mentioned the half gallon of milk story, but going through and looking at tuna, mac and cheese. You can shout out a few items if you want to, Charles. A group of items that help a family put groceries on the table. Rice, beans, pasta. Think about them. What do units look like? How many units in the basket? What does inflation look like for them? Then as you move up the income scale, how many of those customers can you attract in areas you might not have been doing business with them as frequently? You know, can we move some volume into apparel and home and maybe even some of the consumable categories as people become even more value conscious. Dan was talking earlier about some surveys that he's seen that indicate that's already happening. That's the way we think about it is protect and serve, help that group that needs the most help, and then be attractive and attract others, whether it's stores or e-commerce. I think I'd also add, Simeon, the benefit Walmart has with being able to shop in store, being able to pick up the curbside, have things delivered, and with Walmart+ unlimited delivery, we see take up rates in all those channels, whether people are trying to save time or just have someone bring it to their house for them. Depending on where you are on the value spectrum, there should be something that we should be able to help each individual family and customer with. The follow-up is on pricing. All the retailers we follow say that the price gaps are essentially unchanged. I don't know if that's true or not. Do you debate leaning into price? Would you communicate that to us even if you were? How does your philosophy change on price now? If you take a look at where we are now, the best way I would describe it is we're about where we were when the pandemic began, and that was a strong price position that we were proud of. We'll continue to watch price all along the way. Of course, we're gonna manage costs. The thing that Doug said in the beginning that we talk about a lot is we've got to keep the top line growing. You know, what's really important is that we are in stock. We're running great stores. Chris and Dacona and others have made what I think are pretty significant improvements in store standards over the last few months. In-stock has been. It looks to me to be the best it's been in a couple of years. Charles and the team have focused on that. You know, we've got to keep the top line going strong, and then we'll continue to manage the value gap. On costs that need to flow through, like cost of product or the fuel or the shipping that takes to move those, we'll pass those through. What's different in the first quarter, there were some costs that came in really quickly, and in some of those, we felt were more one-time in nature, and those did not flow through. We'll continue to flow through what we need to fairly price and protect the margins where appropriate to make sure that our customers get the right value versus the rest of the market. When I think about investing in price during a period like this, first thing I think about is we know where our gaps need to be to grow profitable market share. Number two, investing in price doesn't necessarily translate to loyalty. There are other things that could translate to loyalty longer term, even when you were not in this inflationary period. We'd like to have more Walmart+ members. We'd like to have more customers shop both stores and e-commerce. When somebody shops both, as we've told you before, our share of wallet goes up, and they stick with us in a bigger way for a longer period of time. Making investments in things that might drive long-term value for the company, we're open to and interested in. In the short term, trying to increase the price gap to have better short-term performance that might not translate into long-term behavior isn't really a good investment. A good example, Doug, I remember, Robbie, last time I saw you in New York three years ago, you asked about capacity of pickup, and the team has done just a fantastic job. It feels like every week now they're finding new unlocks for more capacity, more slots, more time available, more express shipping. I'm just really happy with the team, the way that the team continues to just press boundaries and find new ceilings on the business. Michael Lasser first, and then we'll go to Scott in the back after that. It's Michael Lasser from UBS. Two questions. Doug, one of your peers in the financial services industry recently described the macro as a looming hurricane. Do you share that view? As you're thinking about that, I'll ask my second question, which is, in hindsight, some of the challenges that Walmart experienced in the first quarter were more systemic than idiosyncratic. If this marks an inflection point, transitioning from the last two years, where consumers were binging on the consumption of goods, to now feeling that they can spread their spending across a lot more categories. At the same time, they're experiencing more inflation, and this puts downward pressure on the profitability of the retail sector more broadly. Does that make it more challenging for Walmart to achieve the greater than 4% operating income growth element of its algorithm? Thank you. Yeah. Jamie has a way with words, and I'm a little different. I probably wouldn't try to coin a term. I am concerned about the inflation rate, and should it stay at this level or go up and be there for a sustained period of time, I think that has a negative impact on too many families, and I'm concerned about that. As it relates to the other question, I think the business model change is real and puts us in a good position to decide how much we want to invest to drive growth if we need to and how much flows to the bottom line in a way that we couldn't have before. I think we just need to execute our strategy. We need to execute it as quickly as we can do it well, and that's what goes through my mind. Then the future will be what it will be. If the world is under more pressure and people are generally more value-conscious, we're the place to go. If the world is a little more brighter than that, and people can experience more convenience, then we've got delivery, and we've got e-commerce, and we've got everything else. The world during the pandemic, where so much was spent on goods and not on services, was not a real world. That was a temporary situation all along, and we know that. I hope that people can go on vacations and experience life in the way that we did before the pandemic, peacefully and happily. That's what we hope and pray for. In either environment, we're gonna grow share, and we're gonna do it more profitably over time. The four-in-four algorithm is one that we are excited about, committed to. We do say it's over time, and we've said from the beginning, quarters will be quarters, but we think we can achieve that. With a company of our size, I think that's a really good performance. We're committed to that. Scott, we'll go to Greg Melich after that. Yeah. This is Scott Mushkin from R5 Capital. Way back here. Hey, Scott. The first question is actually for John. Our research has shown just an enormous improvement in the store operations and standards over the last year. Kudos to your team for that. As the economy changes, how do you protect that? Obviously, you had a lot of money to invest. As we move forward, how do you protect that? Yeah, Scott, thanks for the question. You know, when you go back a couple years, there were a number of impacts. Doug mentioned a few this morning. We had divisions of the store close. We're moving people around to keep stores open. There were some times that were pretty tough, and I wanna commend my store teams for all that they did through the pandemic. They showed up, and they served communities. In the last probably year, even more than just the last few months, the team have been working on a lot to make stores and supply chain all work together. We put Chris Nicholas in the role that he's in as the chief operating officer who has everything from import delivery all the way to in-home delivery into refrigerators into people's homes. We took the opportunity to step back and make sure that all the operations are working to a very common goal, which is the end of the Walmart cheer, the customer is number one, and ensuring that each of those teams are delivering on customer metrics. We start all of our meetings with NPS scores and how's the customer feel, and we're really focused on in-stock availability in every one of the channels. Probably the third point that's important is the amount of digital innovation that's happening in the stores for the associates, I think, is making a big difference. It's probably about a year and a half ago, we put about 1 million devices in people's hands. Since that point, we've been taking all the processes and technology they need and putting it on that device so that when an associate walks in ready to go to work, they clock in on their device, and then everything they need is right there in their hands to try to save them time and make it easier for them to be productive. The last thing I'd say, the team has done a really nice job with the regional managers, the divisional managers, market managers, store managers of making sure that they feel like they are an owner of the store. We've had a number of listening sessions with those groups, and we listen, we close it out. We've got digital listening tools where we get 10 million questions a week, and we listen to those, and we go develop things that make it easy for them. Just this week, we had 3,000 associates we had listening sessions with. We're really focused, Scott, on making sure that the associates are heard, the things that they need, we get in front of them, and then our product and tech teams are working as quickly as possible to develop solutions to make them be in the best position they can to be in a winning business unit. Perfect. My follow-up question was around automating the picking process, the MFCs. Any quick update you can give us on that? Yeah. Excited about the work there. We've got a couple places in the country, New Hampshire, Northwest Arkansas, Dallas, where we have sites that are in construction and ready to go. As we work through remodels, I'm really happy with the remodel program and some of the changes we're making. In the facilities that need MFCs, we're going ahead and either building on the space, getting the space clear. The idea of having a supply chain that's upstream, more automated, and can deliver everything from the regional cases, refrigerated cases from automated equipment that's picked and ready for the aisle in the store or the fulfillment center, I think it's gonna make a big difference. The team really has spent probably the last 18 months working with each of the what were pretty static supply chains, a perishable supply chain, an eCom supply chain, and an ambient supply chain. They've worked out a number of ways to ensure that the product flows. We consolidate early. We can deconsolidate as late as possible, which is the store or the curb. Just a lot of great work in the supply chain. I think I'm spending some time with you the next few weeks, so looking forward to showing you a store. When you think about the market fulfillment centers, I would call out automated storage and retrieval systems, and then also that we have automated storage and retrieval system ideas for e-commerce FCs, ambient distribution centers, grocery perishable distribution centers, as well as the MFCs. That technology, which in some cases we had relationships with startups to progress, has all kind of, in the last year or so, gotten to the point where we have high, high confidence that productivity and the numbers that they're supposed to hit, we will hit and deliver. We're really excited about what that means throughout the supply chain, cost-wise, productivity-wise, but also as it relates to the associate experience, back to having high store standards. When you have a pallet that comes in that's more often aisle-ready, department-ready, and on a pallet instead of a floor-stacked ambient load, it's a dramatically different job, and it helps us in a number of ways as it relates to inventory management and accuracy too. That, that's an exciting part of our future. We'll go to Greg next, then Peter, and then Chris. Hi. Thanks. Greg Melich with Evercore ISI. I'll start with my follow-up, actually maybe for Charles. What are we planning units for fourth quarter this year, given the supply chain challenges we have, but then also the extra inventory we have now? Are we buying to up units or down units for fourth quarter? Yeah. Charles, we're all dying to hear. I don't know if that's a question you even can answer because we usually don't answer by unit. What do you, John, why don't you go first? Yeah. Let me start. You know, certainly, Greg, there are categories that we're excited about in the third and fourth quarter. While we see some customers in the value segment switching some, this is still a big economy. There's a lot of money out there. There's a lot of consumption, and there are important categories like toys, electronics, Christmas, where it's important that we do a great job and win on behalf of the customer. Second, really excited about the work that Tom Ward and the e-commerce team are doing, not only with 1P and enabling the entire system to deliver on behalf of the customer, but also the growth in marketplace. I think they've got a lot of exciting innovation there. Third, the last point you made, you know, while I said a bit earlier that there definitely is going to be some inventory we'll work through over the next couple quarters, in those places, we've been really thoughtful, and we're planning what we need to continue to buy, what we could slow down a bit, or what we need to continue to remain aggressive with. I did say, in fact that we did bring in some of our Q2, Q3 inventory that's already here. I think we'll adjust as those lead times adjust. What we saw in the last two years is lead times expanded because the ports backed up. What we saw in early February is a lot of that came through, and it came through much quicker. You know, you see that across the entire country and the industry, but a lot of that came through quickly, which in many cases can help us with share and growth. That was my follow-up. If I could then. My question is sort of on bigger picture. I think, Doug, we were talking a little bit before that, you know, the business model's changed a lot, and this company well-positioned through COVID. Actually amazing, right, what's happened, how you guys got through it. I remember that growing traffic and transaction counts was a real part of the turn, I'd say five, six years ago. Now we're probably running high single-digit transaction counts down from pre-COVID. Given how the business model's changed, the growth of e-commerce, items in basket, should we expect traffic to not grow going forward? Is there a scenario where it would actually be flat or slightly down, and it still makes sense and successful just because the basket's growing and people doing more click and collect and more e-commerce? Like, how do we think about traffic as part of the business model now? It's so interesting, isn't it? 'Cause it's multidimensional now in a way that it wasn't because of the way e-commerce is playing out. There are pickup orders, there are delivery orders, there's walk-in traffic walking into the store just as there always was. I think transaction count is a good measure of the health of a retailer over time, that total transaction count. We've been trying to position the company everywhere to be a bit indifferent as it relates to how people wanna shop. If they want a pickup order, great. If they want a delivery, great. If they want a different kind of delivery, great. If they wanna come to the store, great. We think families are gonna do all the above. When you add it all up, I would just encourage you to look at more than one metric. Track units, look at units per basket, look at the size of the basket, look at how many are e-commerce, how many are stores. Look at share and then decide how you think things are going. For example, if you just take transactions, another question I would ask would be, what share of transactions did you get? If transactions are down a little but your share of transactions went up, then that's good. If transactions are down because they went to e-commerce because something happened like a pandemic, all that's gotta be factored into the way that we think about it. The punchline is, yeah, we want transactions to go up. We wanna design, and we think we are designing a business model that works, whether those are store transactions or some other form of transaction. Great. We'll go to Peter. Hey, guys. Peter Benedict at Baird. First question on labor. Curious what you're seeing in terms of labor availability, trends there, the cost of labor, what kind of your outlook is over the balance of the year and into next year is my first question. Yeah. Why don't you two both take that one? Yeah. Do you wanna start? Sure. About six months into last year, we totally revamped the way that we hire people so that we could hire them within a 24-hour period. We've also been investing in wage rate over the last couple of years. We're now at a minimum of $15. We're probably on average more of, like, $17.40. I think those two things together has meant that we've been at full employment pretty much for the last six months. That doesn't mean that we don't have pockets, so you're still looking at, like, geographies or particular, like, TVC, time, battery, skills, et cetera. You're still in markets trying to find kind of solutions, but pretty much across the board, we've been at full employment. We're not seeing that as being a barrier for us at Sam's. Yeah, ours is similar in some ways, and then there are probably a couple differences to mention. You know, for the most part, through the pandemic, we overscheduled, and we ran a little under. We were a couple points under what we scheduled for most of the last two years. As we got into the end of January and February, we had a number of people on leave as Omicron moved all across the country at a pretty fast rate. In February, we had quite a surge of people that came back to work, probably one that I've never seen anything like for a few weeks. The team made adjustments over time. We worked that through with attrition and scheduling out for a few weeks. I'd say by the end of the quarter, late March, middle of April, end of April, I think we feel really good about our staffing levels. Still some pockets, of course, where we may be over, under. We'll find that as we look across the country and react. Same thing on wages. We made a number of investments during the pandemic. We've made geographic investments, and we'll continue to make those in facilities where we need to, 'cause we wanna make sure that we are appropriately staffed. Supply chain also feel really good about staffing levels all across the country, really end to end. You know, I'm gonna say this again, I'm just really thankful for the team, the way that they've worked through all the containers and everything and has gotten us in the position where we can say we think in a couple of quarters we'll sell through. Generally speaking, feel good about where the staffing is right now. Thank you. My other question is just around Walmart Global Tech. Maybe just some comments on what are the most impactful initiatives there that maybe we should expect to see impact the business over the next 12-24 months. Thanks. Yeah. I over the last few years, we have been really investing in all of those technologies in Global Tech that truly are going to transform the entire retail experience, from the customer experience to what we see the tools that we give to our associates so that they can be more efficient, so that they can serve the customers better, to all the way to how we run our business processes, more automated, more optimized, making use of machine learning, making it a lot more continuous improvement. We've been investing pretty much throughout the stack, from the infrastructure layer, where we are investing in sort of the best of public cloud, private cloud, bringing it all together, data and ML, to our app layer, where we are bringing in things like voice, AR/VR, natural language processing. All of these things are coming together. Ultimately, the idea is we want to deliver friction-free, delightful experiences for our customers. We want to make sure that our associates are focused on helping our customers as efficiently and as effectively as possible, and we want to make sure that the business processes are automated, optimized, and continuously learning. That's the vision. With these investments that are already underway, you'll start seeing that, already you're, you know, whether it is customer experience, John talked about in some of the investments in terms of consumer-grade tools that we are putting out to the associates. All of those things are going to continue to accelerate. It's maybe worth saying, Suresh, as well, you and the team have been focusing on trying to see where we can build global platforms. That's right. From scratch. Glass would be a good example of that. Yeah. The Glass is a platform that we have used for the customer app, which brings the omni experience together. We launched that last year, and that is serving as a platform on which we are now building all customer experience, and not just for the U.S., but we are doing it for international, for Mexico, and we'll start developing more functionality on that. What Judith is talking about is that where possible, we are building leverageable multi-tenanted platforms, so that you build it once, and then you customize it for different scenarios. Okay. We'll go to Christopher Horvers and then Renato. Thanks. Christopher Horvers, JP Morgan. My first question is also a follow-up. Have you seen any bottom of funnel effect in your customer base where they're looking to economize on miles driven and gas and maybe average check, not average price? If you do see it, how would that affect your pricing strategy? One of the things that we did just recently, for example, Walmart+ members, we increased the fuel discount, and we've seen a take-up there that's been helpful. Traffic was solid in Q1. I think that was pretty straightforward. We are seeing some customers use Walmart+ more frequently, and in some cases, we do hear through anecdotal feedback that that is having a delivery made versus driving to the store. I think over time, having this inflation impact in energy and fuel is not helpful. It obviously hurts the customer and their spending power over time. I think we'll have to just continue to monitor everything from the way people are spending on energy, transportation, food, by value chain or by value tier of the customer group, and adapt. Fortunately, we're well prepared to be able to handle any of those. A couple things that I think are interesting though are the different ways that the team have learned to develop. We've got a last mile team and a last mile business that continues to grow and offer new ways that we can deliver. We've got some interesting experience with drone deliveries. We've got electric vans that are consolidating orders. What we're trying to do over time, Tom and the team that originally built all this, is as they build density in neighborhoods for delivery, then we can take more in a single load, and that will enable us to lower our cost per delivery, which ultimately helps power the flywheels. Our costs go down, we can keep the value right for the customer and offer more values to the customer. My follow-up is, you know, given the store base, how do you think about the need to get to next day delivery availability for the 70, 80, 90 million SKUs that sit in a fulfillment center and ship direct to home? Is that a goal of Walmart U.S. over time, and does the three to five year supply chain plan get you to that? We haven't said the number of items that we intend for same day or next day, but generally speaking, we have around 3,700 stores that can deliver this, the entire assortment that's in the store same day. We couldn't have said that two years ago. It would've been just a part of the assortment. On the 1P business, first party, we made pretty significant improvements in the amount of the assortment that is delivered next day, and that will continue to improve. The last one that I'm, I think, most energized about as you look out over time is being able to use the store locations as cross docks for e-commerce orders to flow through, be consolidated with grocery orders, local orders, and e-commerce orders and move out. We've done a lot in the last two years, and it really started, I'm thinking, Srini, maybe in the middle of 2020, enabling e-commerce orders to be handed off to a store that's close. We started those in the beginning. We would ship those via post or a third party. Then as the pandemic went on and we developed more capabilities, those became same day orders. One of the things that we need to improve on is there are a lot of orders where we'll tell you it'll be here in two days, you order it, and it's here in a couple hours. We're delighting customers, I think, in an expected way. That's given us the confidence to start lowering those times and telling customers it'll be today or it'll be tomorrow and bringing the windows down. Thank you. Go to Renato. Renato Basanta, Barclays. I just wanted to follow up on the pricing discussion, because clearly Walmart has a history of advocating, or being an advocate for the consumer in terms of keeping prices as low as possible, and that's needed, very much needed at this point in time. But at the same time, you know, your CPG partners, vendors, they're having their own pressures in terms of inflation. They're talking about protecting their own margin structures. You know, there was a recent quote in The Wall Street Journal where a large CPG partner of yours talked about protecting margins. We're just wondering how you're thinking about, you know, that dynamic playing out, going forward. Thank you. Well, let me start with customers, and then I'll talk about the margins at the same time. You know, first, we have a, well, as of July 2nd, a 60-year history of delivering prices that are trustable, valuable. Less time than 60 years, but for a number of decades, having what is known as every day low price. Being able to have a basket of goods, and it's not always every item every day, but a basket of goods that you can trust you will find a value on that basket at Walmart is really important to us. We spend a bit of time every week looking at where we are versus the market to ensure that customers can trust Walmart for a value, and we won't stop doing that. The way that we have moved inflation through, back to Q1, things happened much quicker than we thought. We have a process where we will evaluate all the costs that are associated with moving goods, receiving goods, putting in the store, and then price against that. Some of those changes happened faster than we thought, so we've readjusted how quickly we wanna make those kinds of adjustments so the merchant see the full cost. Those would include the costs that need to move through, and we'll price to those. As far as suppliers, we've got a very wide range of suppliers. You know, there are certain suppliers that have taken one line, others that are working with us to find ways to reduce costs even in a time when costs are going up. Just this week, Charles has been updating me on a number of suppliers who are working with us to find ways to ensure that the price doesn't go up, and in some cases, I'm really impressed that they even come down. We need to do that for the American consumer at a time when they're pressured. They're pressured on energy and fuel and other things. I won't go through the whole list, you know what they are. It is exciting to see that even in times when it looks like there's inflation everywhere, there are ways to cut costs out of the system, be more efficient, and deliver better value. When you're in a store, you'll see a number of rollbacks now that I'm really proud of that are across the entire assortment, everything from general merchandise into food, and we're gonna continue to do that. Thank you. Great. Thank you. We'll go to Rupesh next, and then Bobby. Rupesh Parikh, Oppenheimer. Thanks for taking my question. The first one is on Walmart+. Clearly, the consumer environment, you know, it's gonna be more, potentially, more difficult going forward. How do you guys think about adoption of Walmart+ in a more challenging environment? You know, as you look at retention, are there additional, you know, I guess, benefits you can add to the offering? Just curious, any thoughts there. I think the retention will be strong and the ability to attract more customers into Walmart+ will be strong as long as the value proposition is strong. Now, number one, for a monthly price, for an annual price, we have a delivery program that offers unlimited delivery to people. Early on, it was tough because we launched it at a time when we had some availability issues and we had some process issues that left customers at times frustrated because their entire order wasn't delivered or it was late. You know, if you're sitting in our meetings, you would just hear Chris and the team and everyone working through each part of that MPS to ensure that we are making the necessary improvements so that customers don't have that frustration. There will likely always be some kind of, at least for the foreseeable future, some kind of substitution that happens at shelf. We're working on things like two-way communication so that customers can talk back and forth to the person pulling their order. Our times have come down, our wait times have come down. The performance, I think, is encouraging. The second thing you said, Walmart+ also offers people the ability to use Scan & Go in stores to save time. Something that's really popular at Sam's Club and was developed at Sam's Club, which they've done a wonderful job improving. Finally, on other benefits, we just raised in a lot of states the fuel discount from $0.05- $0.10 per gallon. I think that's an appropriate discount given the time, and then we'll continue to evaluate other things that we may wanna put in the program. We do have an event today, tomorrow, this weekend. It's our first Plus event that has a number of deals online that went live last evening. The stores are really fired up about signing people up and communicating value. We made all of our associates Plus members, so they're experiencing the value. A lot of energy there, and I'm excited about it. We like to use special purchases for those so that we're not running counter to EDLP. If it's an item we carry all the time, we're trying to drive consistency as much as possible. A one-time purchase on something is also exciting. Yeah. Okay, great. Maybe just one follow-up question. Obviously, after you guys reported, a number of retailers ended up with too much inventory. Just curious, comfort with your gross margin outlook, just given really even more inventory out there and more retailers having to take markdowns? Yeah, we were off 38 basis points in the first quarter. I think what that tells you, and there were some apparel markdowns that were included in that number. I think what it shows you is the team's ability to manage margins across a wide portfolio of categories, whether it's fresh food, grocery, consumables, apparel, general merchandise, hard lines, e-commerce, and then the derivative or I shouldn't say derivative. They're not derivative businesses. They're actually great businesses that we're growing on the side, like advertising, our data service business. There are a lot of things that are happening that are helping Walmart position itself well so that our income statement is more diversified over time. That progress is exciting, and I think we'll be able to tell you more and more about that in the future as it continues to grow. We'll continue to manage this quarter to quarter. I think it's, as I said, I'll just say it one more time, it's probably another couple quarters until we manage the inventory down to a level that we're gonna be happy with. It'll still be up on last year. We still had out of stocks last year. We have some inflation built into the inventory numbers. It's just that 20% of the increase that we need to work through and get out of the system. Go to Bobby next. Thank you. Bobby Griffin, Raymond James. Yeah, so first question, just a follow-up kind of on the supply chain dynamics and stuff with inflation. U.S. entering an environment or already in it where inflation's running a lot higher than the last decade, does that change the desire for Walmart to further integrate into the supply chain to really be able to control costs better than maybe where you're thinking about over the last 10 years? And really kinda, I guess, on the transportation side or even on the grocery side, kind of across the organizations were the questions. We've done a little bit of that, but the thing that comes to mind first is the automation of the supply chain, the automation that goes into the centers to drive productivity that way, more so than additional vertical integration. Okay. Follow-up wise, Sam's Club. You know, the performance over the last couple years has been tremendous. Just curious maybe to talk a little bit about what the next leg of growth is for Sam's. Are we back to kind of maybe some potential club growth, membership growth, membership fee increases? Anything there just now that the business is really operating at a very high level. Yeah. I think what we've seen over the last couple of years is the club, which was traditionally just for walk-in traffic, has now fills multiple channels. We're seeing growth in the foot traffic coming in, but we now obviously have curbside, and we're into our second year of growth in that. We've got ship from club that's also kinda growing, and now we're just leveraging Walmart GoLocal for delivery. That was launched just pre-Christmas, and we didn't put a lot of marketing behind it because we wanted to build out that muscle. We wanted to make sure that we're always gonna delight members when they get that delivery from the club, and that's delivery across kinda fresh, ambient, kind of, you know, basically any item in the club. I think what we're seeing is that the boxes are becoming really productive by serving all of those channels out of the one facility. That's where there's so much organic growth out there for us. That's what we're focused on right now, but I don't close my mind to potentially opening up facilities in the future, et cetera. But where there's a lot of growth, like, still left on the table for us. Okay, we've got about 10 minutes left in this session. If there's any other questions, I didn't see any hands up, but if you have them. Scott's one. Scott's in the back. Scott and Peter. Semi in the front. It's Scott Mushkin again from R5 Capital. The question is regarding pricing and how fast it's moving. It's more a psychology question for the consumer. You know, our surveys would say maybe the consumer's losing its understanding of where price is, you know, supposed to be. Do you think that plays into Walmart as its brand is so strong on price? Do you anticipate that could actually you could gain a lot of shares as the year goes on? Does that make sense? Yeah, Scott, I think back to a video I saw a long time ago of a guy named Jack Shewmaker, that some of you would remember developing everyday low price using spray paint. It was an item, I think that you may remember the number better, but it was like $1.29 a can, and it would go on sale for $0.79 and back to $1.29. He just pegged, I think it was $0.97 every day and ran it for years and years. That was probably late 1970s. That 40 years that we have with customers running everyday low price, I do think builds trust, and I do think it can give customers, in a very uncertain time, some ability to know that we're focused on an everyday low price. We're gonna keep our costs low. Yes, we had some issues in the first quarter. We're working through this, but we wanna keep our costs at a consistent level so that we build trust. If we had to, you know, pick, do you push too much through, too little through, we'll always lean on, we've got to make sure that we're doing the right things for customers with trust on pricing over time. You mentioned 13-week periods. If the 13 weeks had started sooner or later, things would probably look different, but they are what they are. Over time, we'll continue to really work to developing prices that people trust so that we can get the 4% growth. It's been my experience that customers know what's going on, and I think you're right that because things have changed quickly, there may be some that are a little off balance, but they'll figure it out quickly. In an inflationary environment, a lot of customers are paying even more attention to pennies. Over time, your reputation, the trust that you've earned only tracks reality. We just wanna keep earning it, Scott, so that when they do pay really close attention, it just confirms for them that we're the place they should shop. Okay. We'll go to Simeon and then back to Peter. I'll ask two quick ones. First on Fintech. Anything that we could talk about, update, but more importantly on maybe buy now, pay later, or lease to own, things that could help the consumer in this environment. That was the first part. Second is we haven't talked about e-com profits or profitability in a long time, and I know we've moved the discussion away since it's integrated. Given that we think there were material losses, any incremental improvement should be positive to this story. Can we talk about either KPIs or directional improvement that the business is making over time? Okay, what if I take e-com, touch on Fintech and maybe Judith do the same thing? E-commerce and stores. The reason that we haven't spoken as much about is it honestly is just extremely hard to measure. Seeing where the sales come from, that's a bit easier because you can tell someone started in the store, or they started on the app, or they started on a desktop. The fulfillment channels have just really blurred so much, it's really hard to tell. We have stores that serve in-store customers. We have stores that do that and have pickup, and ship from store and cross dock, and there's just so many things moving all at the same time. We're looking at the cost per transaction. As a result of all those transactions, we look at the contacts that we get from customers to try to make sure that our contacts per order is going down so that it's really fluid and friction-free for the customer. Your first question, which I'll come back to on Fintech. We had a couple acquisitions that we've announced, ONE and Even. ONE is a really interesting innovative startup, neobank for customers. Excited about our strategy. We haven't begun integration just yet. We just made the acquisition in April. We also bought a company called Even that is a platform where, you know, hundreds of thousands of our associates find value in saving and being able to pull money off their paycheck they've already accrued. We'll put those together and come up with a great offer. There was another buy now, pay later. We have a partner that we use in store and online with Affirm. That's going well. Yeah. Maybe just Fintech around the world. We see in our Walmex business, the Cashi app that the team have developed, which is continuing to go from strength to strength. They just completely relaunched that recently. At the same time, you heard Gui talking today about the development of BAIT, which is the telecoms offer for customers as well. They're really thinking about from a how do you connect customers around the ecosystem that Walmex is building, and Cashi is a really key part of that. You'll see them continue to build that out in the coming quarters, in the coming years. Probably our best-known Fintech business is PhonePe in India. You saw in the Q1 results they're now reaching $800 billion of annualized TPV. They are in nearly 30 million merchants across India. They started when we very first talked to you about them, of course, about being a P2P business. They've then expanded into merchants. As they think about how they continue to find their growth levers for the future, they're really now leaning heavily into insurance and two-wheeler and four-wheeler insurance in particular. They're thinking about this at every stage of the consumer's life in India, and how do they play a part in that and be something the app gets fired a remarkable number of times. Lee Hopkins, can you remember how many times the app gets fired? I can't give you a number. We are 2.7 billion transactions a month. That's right. It's nearly 3 billion transactions a month that they're now doing. Think about the number of times that app is getting fired. What they're looking to do is create use cases that sit behind that for the way that they can further engage with the customer in the future. They're doing some really exciting work. We were in India recently and spent some time with the engineers there, and I was just telling Suresh the other day, they're still building at that scale they have now of some of the original code that they wrote in the beginning, and it's now able to handle that 3 billion transactions, which is extraordinary. I think it's obvious, but I'll say it just in case some people haven't. Haven't really focused on this. We're trying to design for families, design for customers and members, a retail experience that has stores or clubs plus e-commerce into various forms. That brings along with it a marketplace business, a fulfillment business, an ad business, and we're going further into healthcare in multiple countries and financial services in multiple countries. I think you can hear in our earnings script and in this conversation and other places that there are commonalities of that connected flywheel that are happening across markets, which relates to the point that Suresh and Judith were making about more global platforms. Build it once, leverage across as many countries as you can, adjusting for compliance differences if you need to. That commonality is, it's an interconnected relationship, kind of easy conceptually to get, but hard to design through an app or a site and other kind of digital forms that'll emerge in the future. It's so exciting. I mean, if you can turn one relationship, whether it comes through e-com or stores or health and wellness or financial services, all being top of funnel into a set of relationships where the other businesses become defaults, which in a digital world you can do better than you could in an analog world, you've got a more valuable company. That's what we're trying to do. We can't get all the businesses stood up at the same pace. India is different than the United States, and stitching them together in a way where everything is intuitive requires a change to way of working, more, design mindset and different skill sets in the company, which we've been adding to the company. Please ask the last question to Brett. I don't think he's gotten one yet. Peter, do you have the mic? Peter, this will be our last question. You can ask me a really long-term question, Peter. That was a great wrap-up. There I am. I have an answer at this point. For Brett, have you gotten sunglasses since April to wear outside watching sporting events? That's awesome. Oh, there's a famous photo of Brett that he does not want you to look at a golf tournament where he's squinting and someone made fun of him, for those of you that don't know. Not that we wanna further publicize it. That is a fitting end to 22 years right there, Peter. Good. Thank you. Well, I'm just gonna ask Judith to maybe talk a little bit about China and the Chinese consumer, but it just feels, I don't know. It's really not worth it after that, is it? Please nothing, so we can wrap it up. Yeah. I mean, listen, those of you at the meeting today heard me give a call out to the Walmart China team. You'll all be following events there and the lockdowns that have been happening, particularly at Shanghai. The single focus of our team is making sure that we can serve customers in some way there. As things have taken a challenging turn, the team have pivoted entirely into e-commerce. For many people, the thing they've been most interested in is how do they get food to their homes while they've been locked down. If I, Peter, just give you an example of how the team have been handling that. Usually, we have about 2,500 associates across our stores and clubs working in Shanghai. Across the clubs that we have there, we have five stores and three clubs. At one point, we had just 170 people working, and we still managed to keep the e-commerce business running, serving, and pivoting heavily into fresh fruit and vegetables for people, less so in the other categories, but doing that. The team are doing an utterly tremendous job there, and we continue to give them all the support that we can. That will end our Q&A session. Did you wanna keep going? Yeah, I'll close. Yeah. Do you have anything you wanna share before I do that? Yeah. Today's a weird day. It's you know, 22 years, almost seven years in this role. The great thing for Walmart is it's such a great company, such a great role, but it's easy to attract really good people. John David Rainey, you have that, who's coming in, so I know you'll enjoy working with him. This was my first CFO gig when I started this 6.5 years ago, and I got to know a lot of you for the first time during that period. Over the years, I've gotten to know you even more. You've been helpful to me, you've been helpful with the questions you ask, you've been helpful to the company with the questions you ask because it makes us better. You know our company really well. To a person, you've always been fair, and that's all you can ask, I think, from sitting in my chair. I've really enjoyed working with you. I know I'll see some of you as I move on, but company's in a fantastic position. You can tell the leadership team is strong. People have asked, "If it's so great, why are you leaving right now?" That it's because it's never over at Walmart. There's never an end. It always keeps going. When I look at the next three, four, five years, the upside I see for this company is unlimited. Greg, you asked about the business model. The business model is exactly what we need to be doing. The strategy is right, and I know we're gonna execute. I know that for certain because I've seen it my entire career. I feel great about Walmart. I'll just add my gratitude and say thank you for coming. Thank you for paying attention to the company, those of you that are listening or those of you that are here in person. We can manage the short term while we build for the long term, and that's what we're gonna do. Thank you all. Great. Thank you.